SÍNTOMAS Deposiciones blandas
II.6. DIAGNÓSTICO SEROLÓGICO
Default August 1914: Suspension of coupon payments for three years (1914-1917). Suspension of the sinking fund payment for 13
years through July 1927.
Announcement August 1914: Issue of a 5% funding loan to pay for missing coupon payments from 1914 to 1917. Coupon payments
in cash are resumed in August 1917. Sinking fund payment is resumed in August 1927.
1898 41,911,231
Default July 1898: Suspension of coupon payments for three years (1898-1901). Suspension of the sinking fund payment for 13
years through June 1911.
Announcement July 1898: Issue of a 5% funding loan to pay for missing coupon payments from 1898 to 1901. Coupon payments in
cash are resumed in July 1901. Sinking fund payment is resumed in July 1911.
98,569,982
BRAZIL
1828
Default 1828: Brazil unilaterally suspends the sinking fund payment of the Portuguese Bond in 1828. It resumes the sinking fund
payment in 1836 only to suspend it again in 1840. Again it resumes the sinking fund payment in 1843 to suspend it in 1844. Finally, it resumes the sinking fund payment of this bond in 1850. Brazil also unilaterally suspends the sinking fund payment of the 1824-1825 bond in 1830 only to resume it in 1851. Still, Brazil continues to pay coupons on the debt over the period 1828-1950.
Agreement 1851: Full resumption of the suspended sinking funds payment in 1851.
4,868,468 30,770,930
Default March 1891: Suspension of coupon and sinking funds payments of the first ten bonds. Agreement April 1891: Issue of the 6% funding loan of 1891 to service (sinking fund and coupons) the ten bonds in default between
1891 and January 1st, 1894. It is agreed that there will be a full resumption of the debt service at par after 1894. A new agreement is reached in July 1893.
July 1893 (Romero's Agreement): With the new bonds added, the amount outstanding in 1893 is 44,152,975 pounds. Interest rates
of the 10 (first defaulted) bonds are reduced by 60% for 5 years. Interest rates of the bonds added in 1893 are reduced by 100 basic points for 5 years. Suspension of sinking fund payment of all bonds until 1901.
1891
Default
Year Bonds in Default
Debt Outstanding at the time of default (in pounds) Agreements 1827 6% Loan 1822 (L) 936,157
Default 1827: Suspension of coupons and sinking fund payments. Agreement 1842: Issue of a new bond for the repayment of the principal at par value. This bond has similar charateristics to the one
issued in 1822. Issue of a 3% 758,287 pound bond for the unpaid coupons (not capitalized) . Coupon and sinking fund payments are resumed in September 1847. 4.5% Loan 1858 (L) 6% Loan 1867 (L) 5% Loan 1870 (L) 5% Loan 1873 (L) 5% Loan 1875 (L) 4.5% Loan 1885 (L) 4.5% Loan 1886 (L) 4.5% Loan 1887 (L) 4.5% Loan 1889 (L) 5% Loan 1892 (L) 4.5% Loan 1893 (L) 4.5% Loan 1895 (L) 5% Loan 1896 (L) 4.5% Loan 1899 (L) 5% Loan 1905 (L) 5% Loan 1909 (L) 5% Loan 1910 (L) 4.5% Loan 1911 (L) 5% Loan 1911 (1st Series) (L) 5% Loan 1911 (2nd Series) (L) 5% Annuities A,B C (L) 5% Railway 1915 (L)
7% Loan (South Longitudinal Railway) 1922 (L) 7.5% Loan 1922 (L) 8% Transandine Loan 1922 (L) 7% Loan 1922 (NY) 6% Loan 1926 (L) 6% Loan 1926 (NY) 6% Loan 1927 (NY)
5% Loan (South Longitudinal Railway) 1928 (L) 6% Loan (South Longitudinal Railway) 1928 (L) 6% Loan 1928 (L)
6% Loan 1928 (NY) 6% Railway Loan 1928 (NY) 6% Loan 1929(L) 6% Loan 1929 (NY) 6% Loan 1929 (S) 6% Loan 1930 (NY) 6% Loan 1930 (S) Guaranteed Obligations
5% Mortgage Bank Chile Loan 1911 (P) 5% Mortgage Bank Chile Loan 1912 (P) 7.5%Transandine Railway Chile Loan 1924 (L) 6.5% Mortgage Bank Chile Loan 1925 (NY) 6.75% Mortgage Bank Chile Loan 1926 (NY) 6% Mortgage Bank Chile Loan 1926 (NY) 6% Mortgage Bank Chile Loan 1928 (NY) 6% Mortgage Bank Chile Loan 1929 (NY)
Default 1879: Suspension of sinking fund payments in the second semester of 1879 due to the war against Bolivia and Peru. Announcement 1884: Resumption of sinking fund payments in the second semester of 1884 after the victory of Chile in the war
against Peru and Bolivia.
Table 3 Continuation Defaults and Renegotiations
CHILE
1879 6,163,106
1931 88,220,417
Default 1931: Partial suspension of the debt service in July 1931 and complete suspension of coupon and sinking fund payments in
August 1931.
Debt Service Adjustment 1935: Partial resumption of coupon and sinking fund payments. Reduced coupon rates, with new rates
ranging from 0.4% to 2%. Starting in 1935, while in default, the Chilean government cancels part of the outstanding debt through bond purchases at prices oscillating between 13% and 37% of their par value.
Agreement 1948-1949: Issue of a new bond paying interest rates increasing from 1.5% in 1948 to 3% in 1954, and remaining
constant thereafter in exchange for bonds in default at par. The new bond has a 1% sinking fund yielding a maturity of 46 years. Similar offers are extended to bondholders of New York-, London-, and Switzerland-issued bonds. Offers for New York- issued bonds are extended in July 1948, the offers for London-issued bonds are extended on December 21, 1948, and those for Swizerland-issued bonds are extended in August 1949.
Default
Year Bonds in Default
Debt Outstanding at the time of
default (in pounds)
Agreements
1821 10% Loan 1820 (L) 273,891 Default 1821: Suspension of coupon payments.
Agreement 1822: Issue of a 10% bond to pay missing coupon payments in cash.
6% Loan 1822 (L) 6% Loan 1824 (L)
1% - 6% Active Bond 1845 (L) 1% - 3% Deferred Bond 1845 (L)
3% New Active Bond 1845 (L) 3% Deferred Bond 1845 (L) 2%-3% New Active Bond 1861 (L)
1879 4.5%-5% New Conversion Bond 1873 (L) 1,947,871
Default 1879: The coupon due in July 1879 is partially paid. Starting in October 1879 coupon payments are suspended. Sinking
fund payments are also suspended.
Intermediate Renegotiations: Bondholders submit a proposal in 1889 that is modified by the Government in 1890 and is rejected by
bondholders in 1891.
Agreement 1896 (Roldan-Passmore Agreement): A New 2,700,000 pound bond is issued to pay the outstanding principal and
unpaid coupons (not capitalized) of the 1873 bond. Coupon rates of this new bond are set at 1.5% on January 1st 1897, increasing by 0.5 % every 3 years until the rates reach 3%. The principal outstanding of the 1873 bond is converted at par while the unpaid coupons are converted at 43% of their nominal value. Sinking fund payments are agreed to start on January 1st, 1900. The sinking fund rate is set at 0.5% in 1900, increasing by 0.5% every 3 years until reaching 1.5%. The sinking fund is applied to purchases in the market while the price is below par. When the price is at or above par, the sinking fund is applied to drawings at 60% when the coupon rate is below 3% and at 70% when the coupon rate is at 3%.
1900 1.5%-3% Consolidated External Bond 1896 (L) 2,700,000
Default 1900: Sinking fund and coupons payments are suspended in the midst of the Thousand Days' War (1899-1902). Agreement 1905 (Holguin-Avebury Agreement): Coupon payments are agreed to be resumed starting on July 1st, 1905. Interest
ratest are the same as those agreed in 1896. Issue of certificates at par for the unpaid coupons (not capitalized). Payment of 50% of this amount by June 30th, 1907. The sinking fund payments are suspended until 1910 when they are resumed at the same rate as stated in the Agreement of 1896.
5% Loan 1906 (L) 6% Loan 1911 (L) 6% Loan 1913 (L) 5% Loan 1916 (L) 6% Loan 1920 (L) 6% Loan 1927 (NY) 6% Loan 1928 (NY) Guaranteed Obligations
Agricultural Mortgage Bank 7% Loan 1926 (NY) Agricultural Mortgage Bank 7% Loan 1927 (NY) Agricultural Mortgage Bank 7% Loan 1927 (NY) Agricultural Mortgage Bank 7% Loan 1928 (NY) Agricultural Mortgage Bank 7% Loan 1929 (L) 1848
Default 1848: Sinking fund payments are suspended in 1848. The last coupon of 1848 and the coupons of 1849 are paid with
Treasury Bills. Starting in 1850 all coupon payments are also suspended.
Agreement 1861: Interest on the Active and Deferred bonds issued in 1845 remain as scheduled under the 1845 agreement. A new
2%-3% Active Debt bond is issued for the unpaid coupons (not capitalized) of the Active bond of 1845. In addition, 30 hectares of land are offered to bondholders for each 100 pound of holdings of the Active bond of 1845 and 16 hectares of land for each 100 pound holdings of the Deferred bond of 1845. The redemption of the three bonds is agreed to be made through market purchases. (At the time of the agreement, the prices of these bonds are well below par, with the Active bond of 1845 at 16%, the Deferred bond of 1845 at 8%, and New Active bonds of 1861 at 35%) .
1873
6,460,550
Default 1873: A new arrangement for the unification of the external debt is reached in 1873. Agreement 1873: Issue of a new bond for 2,000,000 pounds with coupon rates of 4.5% until 1878. From then on rates are raised to
4.75% and remain at that level until custom revenues are above a certain minimum level when they increase to 5%. This bond is exchanged for the old bonds as follows: 1) Each 100 pounds of the 1845 Active Bond is exchanged for 34 pounds of the new bond; 2) Each 100 pounds of the 1845 Deferred Bond is exchanged for 17 pounds of the new bond. 3) Each 100 pounds of the 3%1861 New Active Bond is exchanged for 66 pounds of the new bond. 4) 2,000,000 hectares of land are given in compensation for the loss of interest payments agreed in the conversion of 1873.
6,630,000
Default 1826: Suspension of coupon and sinking funds payments. Agreement 1845: Issue of a new Active bond to pay the outstanding debt principal at par. The interest rate on this new bond is set at
1% for 4 years, with increments of 0.25% per annum until the maximum 6% is reached. Issue of a Deferred bond for the unpaid coupons (not capitalized). The Deferred Bond does not pay coupons for the first 16 years. The coupon rate is set at 1% for the 17th year with an annual increment of 0.125% per annum until 3% is reached. The service of the Deferred bonds is guaranteed by the tobacco monopoly and customs receipts.
3,312,975
Notes: Gran Colombia is formed in 1821 with the union of New Granada (Colombia), Ecuador, and Venezuela. The Gran Colombia is dissolved in 1829-1830. In 1834, the external debt of Gran Colombia is divided among Colombia, Ecuador, and Venezuela in the folowing proportions: Colombia: 50 percent, Venezuela: 28.5 percent, and Ecuador: 21.5 percent. The outstanding external debt of Colombia in 1834 is 3,312,975 British pounds. In this table, the debts outstanding at the time of the defaults in 1821 and 1826 are scaled down to 50 percent of the outstanding debt of the Gran Colombia as is agreed in 1834.
Table 3 Continuation Defaults and Renegotiations
1932 16,229,552
Default 1932: Sinking fund payments are suspended in February 1932. Coupons from July 1933 to January 1934 are paid one third
in cash and the balance in non-interest bearing scripts. Issue of 4% funding certificates to pay for the coupons between January 1934 to January 1935. All the payments are suspended from January 1935 to December 1939. Coupon payments are resumed on the two bonds issued in New York at 3% in 1940. London-issued bonds remain in default until April 1942. During the default, Colombia also purchases bonds in the market, at prices oscillating between 15% and 36% of their par value.
Agreement 1941 - Bonds issued in New York : Exchange of the 6% bonds for a new 3% bond at par with extended maturity. Issue
of new 3% bond to pay for 50% of the unpaid coupons (not capitalized) from 1935 to 1939. Agreement July 1942 - Bonds issued in London: Conversion of the 6% and 5% bonds for a new 3% bond at par with extended maturity. Issue of a new 3% bond to pay for the 50% of the unpaid coupons (not capitalized) from June 1935 to December 1939 and for 60% of the unpaid cupons (not capitalized) between 1940 and March 1942.
COLOMBIA
Default
Year Bonds in Default
Debt Outstanding at the time of default (in pounds) Agreements 5% Loan 1824 (L) 6% Loan 1825 (L) 3% Loan 1851 (L)
The following bond is added in 1866.
3% Loan 1864 (L)
3% Loan 1886 (G) (L) (P) 5% Loan 1894 (G) (L) 5% Loan 1899 (L) 4% Loan 1904 (NY)
4.5% Loan 1908 (Irrigation Bond) (NY) 4% Loan 1910 (P)
6% Loan 1913 (L)
Guaranteed Obligations
5% Mexico City Loan 1889 (L) 4% National Railway Bond 1908 (NY) 4.5% Veracruz-Pacific Railway Bond 1904 (NY) 5% Tehuantepec Railway Bond 1902-1904-1905 (L) 4.5% Tehuantepec Railway Bond 1905 (L) 3% Loan 1886 (G) (L) (P)
5% Loan 1894 (G) (L) 5% Loan 1899 (L) 4% Loan 1904 (NY)
4.5% Loan 1908 (Irrigation Bond) (NY) 4% Loan 1910 (P)
6% Loan 1913 (L)
Guaranteed Obligations
5% Mexico City Loan 1889 (L)
6% Mexican National Packing Co. First Mortgage 1911 (NY) 6% Mexican National Packing Co. Second Mortgage 1911 (NY) 5% Tehuantepec Railway Bond 1902-1904-1905 (L) 4.5% Tehuantepec Railway Bond 1905 (L)
6% Loan 1822 (L) 6% Loan 1825 (L)
5% Loan 1869 (L) 6% Loan 1870 (L) 5% Consolidated Loan 1872 (L)
7% Tobacco Loan 1927 (NY) 6% Loan 1927, first series (NY) 6% Loan 1928, second series (NY) 6% Loan 1928 (L)
7.5% Guano Loan 1922 (L)
1854 10,241,650
Default 1854: Sinking fund and coupon payments are suspended. Intermediate Renegotiation 1864: Issue of a 3% loan for 4,864,800 pounds to pay 9.5 years of unpaid coupons of the 3% Loan
1851 with a 67% premium.
Agreement 1886: Issue of a new 3% Loan for the conversion at par of the 3% Loan of 1851, for 50% of the 3% loan of 1864, for 15%
of the interest in arrears of the 3% loan of 1851 from July 1866 to July 1886, and for 20% of other smaller unpaid debts. The principal of the 1886 bond is 14,626,279 pounds. The government has the right to amortize the 1886 bond with purchases in the market or to redeem them by drawings at the rate of 40% of their par value up to December 31, 1890. After that, the redemptions can be effected by purchases in the market of by drawings at the rate of 50% of their par value.
MEXICO
Default 1928: Debt service agreed to be resumed in January 1928 is suspended. There are various failed attempts to settle the debt
in 1930 and 1931.
Agreement November 1942: Reduction of the outstanding principal to about 25% by converting all the debt at the rate of 1 US dollar
= 1 Mexican peso and 1 British pound = 4.85 Mexican pesos (the market exchange rates at the time of the agreement are 1 US dollar = 4.85 Mexican pesos and 1 British pound = 19.4 Mexican pesos). All past due interest from 1923 to 1942 is agreed to be canceled at 1% ot its face value in cash and the unpaid coupons maturing before 1923 are agreed to be canceled at 2.5% of their face value in cash.
57,219,334 1928
PERU
1931 20,924,277
Default 1931: Sinking fund and coupon payments are suspended in May 1931. Still, the government amortizes part of the debt with
purchases in the market from 1931 to 1953. Prices of the bonds oscillate between 6 and 26 percent of the par value.
Agreement 1938: The 1922 Guano Loan is restructured. The interest rate is reduced to 4% and its sinking fund is increased from
1.5% to 2%.Accepting bondholders waive the right on any unpaid coupons before December 1937. The government also offers a partial payment of the unpaid coupons in 1931 and 1932 for the other bonds.
1947: Peru makes a unilateral offer to renegotiate the debt . This offer includes: 1) To exchange at par the 7% Loan 1927, the 6%
Loan 1927, the 6% Loan 1928 (NY), and the 6% Loan 1928 (L) for new bonds with lower interest rate (increasing from 1% to 2.5%) and sinking fund of 0.5%, maturing in January 1997. 2) All coupons arrears from 1932 to December 1936 are cancelled. At the end of 1949 about 50% of the outstanding amount has been exchanged under the new terms offered.
Agreement November 13th, 1951 - Bonds issued in New York: (Amended offer to Agreement 1947, effective January 1953)
Conversion of the old bonds into new 3% bonds. In addition, bondholders receive non-interest bearing scrip certificates in payment for 10% of unpaid coupons from January 1932 to December 1946. These scrip certificates are to be redeemed in annual installments during 15 years starting in January 1953. Upon conversion, bondholders have to waive any rights on previously unpaid coupons. By end of 1955, about 95% of the bondholders have accepted this offer.
Agreement January 1953 - Bond issued in London : Conversion of the outstanding debt at the rate of 1.74 pounds of the new bond
for every pound of the original bond. The Interest rate of the new bond is 3% with maturity in 2007. In addition, bondholders receive non-interest bearing scrip certificates in payment for 10% of the unpaid coupons between 1932-1947. The script certificates are to be redeemed in annual installments during 15 years starting in April 1954 and a one time payment in January 1954 of about 11% of the unpaid coupons between 1947-1953.
Default 1826: Sinking fund and coupon payments are suspended in April 1826. Agreement 1849: Conversion of the two bonds for a new active bond with interest rates at 4%-6%. Twenty-five percent of the unpaid
coupons is written off. Issue of a new passive bond in 1849 to pay the balance of unpaid coupons (not capitalized) with interest rates at 1%-3%. Coupons of this bond start to be paid in 1852.
1,816,000 1826
Default 1876: Suspension of sinking fund payments. Mandatory conversion of the 6% loan 1870 into 5% consolidated bonds of 1872
deposited in the Bank of England. Coupons from 1876 to 1878 are converted in new bonds carrying interest.
Agreement 1889 (Grace's Contract): Cancelation of all the foreign bonds (principal and coupons) in exchange for 2 million tons of
guano, with a value of approximately 11 million pounds in 1899. Also, the concession of the whole national railway system for 66 years, an annuity of 80,000 British pounds for 30 years, and the concession of the steamboat in Lake Titicaca. There are also compensations in land and the exploitation of the telegrahp and telephone system.
36,400,000 1876
1914 66,349,636
Default 1914: Sinking fund and coupon payments are suspended in July 1914. Agreement 1922: Unpaid coupons from 1913 to 1923 (not capitalized) are agreed to be paid at par over a period of 40 years starting
in 1928. Coupons from 1923 to 1927 are agreed to be paid part in cash and part with 20-year scripts carrying 3% interest since 1928. The sinking fund and coupons are agreed to be resumed in cash in a date no later than January 1928. Debt service is guaranteed partially by taxes on oil exports and the revenue of the railway system. The National Railway System is privatized in 1925. .
Table 3 Continuation Defaults and Renegotiations
1827
Default 1827: Coupon and sinking fund payments are suspended. Intermediate Renegotiations: There are several renegotiations in 1831, 1837, and 1846 with exchanges of bonds and issues of
Deferred bonds to pay for coupons in arrears. All the arrangements fall through within months. In 1846 the total debt is consolidated into a 5% new bond of 10,241,650 pounds.
Agreement 1851: Coupons in arrears from July 1847 until the agreeement total 1,871,276 pounds. These arrears are cancelled with
a payment of 2,500,000 US dollars (about 500,000 British pounds). Conversion at par of the outstanding 5% loan of 1846 into a 3% loan. 250,000 pesos are agreed to be sent annually to London to start paying the principal of this new 3% loan starting in 1857. 6,584,362
Default
Year Bonds in Default
Debt Outstanding at the time of default (in pounds) Agreements 1875 6% Consolidated Loan 1871 (L) 3,110,960
Default 1875: Default is announced on March 27th, 1875. Funds deposited in London are used to meet the debt service until early
1876. Suspension of sinking fund and coupon payments afterwards.
Agreement 1878: Issue of a new bond of 373,315 pounds at 1.25% to pay for the unpaid coupons (not capitalized). The principal is
exchanged at par for new 6% bonds. Interest of 2.5% for 5 years while the principal amortization is on hold. Full resumption of the debt service in February 1883. The bond can be amortized through purchases in the market.
5% Unified Loan of 1883 (L) 6% Loan 1888 (L) 6% Baring Loan 1890 (L) 3.5% Consolidated loan 1892 (L) 5% Loan 1896 (L) 5% Loan 1905 (L) 5% Loan 1909 (L) 3.5% Uruguay Loan 1891-96 (L) 5% Loan 1896 (L) 5% Loan 1905 (L and P) 5% Loan 1909-45 (P) 5% Loan 1914-51 (L) 5% Loan 1915 (NY) 5% Loan 1919 (L) 8% Loan 1921 (NY) 6% Loan 1926 (NY) 6% Loan 1930 (NY) Table 3 Continuation Defaults and Renegotiations
Notes: (G) (L), (NY), (P), (S) identify the financial center where the bond is issued. G stands for Germany, L stands for London, NY stands for New York City, P stands for Paris, and S stands for Switzerland.
URUGUAY
Default 1891: Suspension of sinking fund and coupon payments. Agreement 1892: Issue of a new 3.5% bond to pay for coupons in arrears (not capitalized) and in exchange of the outstanding
principal of three bonds including conversion premiums of 5%, 15% and 13%. Total issue of the new 3.5% bond reaches 19,300,000 pounds. The new bond has a 1% sinking fund. The government has the right to increase the amount devoted for redemption.
1891 16,724,300
1931 30,069,471
Default 1931: Default annuncement in May 1931. The sinking fund payments start to be suspended in December 1931. Interest rate
of all the bonds are unilaterally reduced to 3.5% from October 1933 to October 1937.
Agreement September 1937 - Bonds issued in New York : Balance of the partially paid coupons from 1933 to 1937 is waived.
Interest rates on all bonds are reduced. New interest ranging from 3.5% to 4.5%. Maturities are extended.
Agreement November 1938 - Bonds issued in London and Paris: Balance of the partially paid coupons from 1933 to 1937 is
waived. Interest rates of all bonds are reduced to 3.5%. Assented bondholders receive a cash compensation of 1% of the outstanding principal during the first 5 years. Maturities for most of the bonds are extended. By the end of 1939 about 95% of the bondholders have accepted these offers.
1915 23,807,799
Default 1915: The sinking fund is suspended until one year after the end of the First World War. Coupons are paid regularly. Agreement 1921-22: The sinking fund payments of the loans of 1905 and 1909 are resumed in July 1921 while the sinking fund
payments of the consolidated loan of 1891 and of the loan of 1896 are resumed in August 1921 and January 1922, respectively. Coupons are payed as scheduled originally.
Countries Year of Default Debt Relief Investors' Haircuts Average